Oregon Hedges its Bets By Courting Solar Industry

With so many commercial industries struggling and unemployment rising Oregon is attempting to regain control over its economy by wooing solar researchers and companies onto its turf – …

With so many commercial industries struggling and unemployment rising Oregon is attempting to regain control over its economy by wooing solar researchers and companies onto its turf – something this state has been very good at in the past. Oregon has worked feverishly to build a reputation as one of America’s top solar hubs, and has tirelessly sought out solar researchers, manufacturers and energy generators over the past five or so years.

When times were good Oregon was able to attract numerous manufacturers, researchers and projects to the state. Now that times have changed, however, it’s unclear whether all the time and money Oregon is investing into courting the solar sector will, in fact, provide a barrier against economic turmoil or sink the state further into depression.

One of Oregon’s latest solar victories comes in the form of a $1.34-million grant for solar energy research that was provided by the Oregon Built Environment and Sustainable Technologies Center (Oregon BEST), in conjunction with the Oregon University System, the Oregon State University College of Engineering and the Oregon State University Research Office. The money will be divvied between the University of Oregon and Oregon State University, which will use it to create the Photovoltaics Laboratory of the Oregon Support Network for Research and the Oregon Process Innovation Center for Sustainable Solar Cell Manufacturing, respectively. While university research will definitely be a big part of the new laboratory and center, the state is more excited about what it can mean for current and prospective businesses.

“From an industry perspective this investment is tremendous,” said David Kenney, president and executive director of Oregon BEST. “The energy industries play a significant part in the Oregon economy, and from a utilities perspective most of our large utility providers are all thinking about renewable energy.”

Though the facilities will be located on the respective universities’ campuses, the laboratory and research centers will be open to other Oregon-based schools, as well as public and private businesses. “Having access to the equipment and laboratories will be a huge resource for [local businesses],” Kenney said. “If a manufacturing company has a solar cell with a defect it will be able to come into the lab and study it under a variety of conditions.”

Aside from these state-of-the-art facilities, businesses will also have access to university researchers and data, as well as a huge workforce population that is well versed in solar energy research and manufacturing. While the actual equipment will not be available until later this year or early 2010, Kenney noted that businesses still have immediate access to researchers and the workforce pool.

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Though it’s too early to tell whether these projects will actually bolster Oregon’s economy one thing is certain – the state could use a boost. The state lost 34,700 non-farming jobs in January and February alone, and boasts the third highest unemployment rate in the country, which currently sits at 10.8 percent.

In addition to the grant money, Oregon is also trying to bolster its reputation as an electric car hub. Gov. Ted Kulongoski has aggressively marketed his state as an automotive-friendly destination by widely promoting two bills that would encourage the manufacturing and selling of electric vehicles in Oregon.

One of the bills would allow electric vehicle manufacturing facilities to become eligible for the Business Energy Tax Credit (referred to as BETC or Betsy), which allows energy-conserving businesses to receive between 35 percent and 50 percent off their total green project costs. The other bill would allow a current hybrid tax credit to transfer to zero-emission vehicles, which the governor is hoping will appeal to electric car manufacturers. So far Kulongoski’s plan has worked. Nissan agreed to introduce its new electric car here in 2010, and Mitsubishi announced plans to partner with the state and Portland General Electric to develop a network of vehicle charging stations that will promote the zero-emission vehicles. The state is still trying to woo Think, a Norway-based electric car company, into establishing its first U.S. manufacturing facility in Portland. Oregon is one of eight U.S. locations that Think is considering.

The state has also successfully swayed a solar electric systems manufacturer into entering the Oregon market. Residential Power Systems, a division of the New York-based SunWize Technologies Distributed Power Group, just decided to open its first branch in Philomath, which is between Eugene and Portland. The company has tapped two local solar industry experts to oversee the new office. It’s also offering residents a discount of $1,000 on any solar electric systems purchased in April.

Staying true to its solar roots, Oregon is also working on a proposal that would create a 71-acre solar energy farm at the Medford Airport, which could potentially power 2,000 homes. The state is hoping to utilize funding from Obama’s stimulus plan for the project.

In previous years Oregon has successfully courted numerous solar powerhouses into its borders that have put the state on the map as a top solar center. In 2008, Solar World USA created North America’s largest photovoltaic panel manufacturing plant in Hillsboro – a move that Germany-based Solar World’s vice president Gordon Brinser said was made possible by Oregon’s many tax credits and willingness to open up their universities’ research facilities.

Although experts believed that the plant could add approximately 1,000 new jobs to Hillsboro over the next three years, much has been made about the tax credits that made this location possible. As previously mentioned, sustainable businesses can apply for Betsy credits in order to alleviate some of the costs associated with going green. Though there’s nothing inherently wrong with Oregon creating a tax credit that should, in theory, drive sustainable companies into the state, many believe a problem does lie within the credit’s pass-through option.

This option allows recipients of the tax credit to sell that credit for cash. What resulted was the sale of $11-million-worth of tax credits by Solar World to Wal-Mart for only $7.3 million. The discount chain can now use these credits over the next five years to offset some of its corporate state income taxes. This will cause Oregon to lose out on substantial income taxes, while Solar World has found a quick way to obtain some cash. In fact, the company has already been approved for another $19.4 million in Betsy credits, which it is again free to sell if it so desires.

Clearly it seems that not all of Oregon’s plans to lure sustainable companies and green-collar jobs have worked out. It is, however, hard to deny that the state hasn’t done a lot to make a name for itself in the solar realm. Oregon has begun six new solar manufacturing projects over the past year and a half, which the state hopes will create 2,000 jobs by 2011. It is also home to the world’s largest wind farm, as well as one of the most impressive biodigesters out there. The biodigester is located at the Oregon Health & Science University’s Center for Health and Healing, and was instrumental in the facility becoming the first of its kind to receive platinum certification from the U.S. Green Building Council’s Leadership in Energy and Environmental Design program. Oregon also has more hybrid car owners per capita than any other state.

In these uncertain times there’s no telling what survival strategies will and will not work – both for Oregon and the rest of the nation. Whether its efforts are fruitful during the downturn or not, Oregon has made it clear that the state takes its investment in solar power seriously.


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